Employer believed layoff would be permanent but once things changed workers were entitled to temporary layoff benefit, court says

07/17/2008|Canadian Employment Law Today

A group of Ontario workers who were laid off for nearly a year then rehired were on a temporary layoff and entitled to benefits under their collective agreement, the Ontario Court of Appeal has ruled.

Canadian General-Tower (CGT), a producer of coated fabrics and films for industrial applications based in Cambridge, Ont., laid off an entire shift of workers, totalling 23 people, on Oct. 29, 2004. The layoff notices indicated CGT would maintain recall rights for either 12 or 24 months.

The collective agreement the company had with its union provided a supplemental unemployment benefit plan (SUB), which allowed a weekly benefit for employees who were on temporary layoff. The SUB was added to employment insurance benefits to provide employees who qualified with 80 per cent of their regular pay.